At some point, as you gain market traction, the large companies that you are "displacing" are going to recognize you as a threat. It is important to understand the range of responses you may need to be prepared to deal with:
In a perfect world - the reaction is slow because the incumbent vendors are distracted with internal politics and other threats. Data Domain attacked the tape market - most of our competitors, which were tape library vendors, sucked and were completely distracted by mergers, competition between each other, and just generally not being very smart.
Gaining momentum quickly is very important - having a critical mass of clients and resellers is critical to your success when the market wakes up... they (customers and resellers) will be you best defense for what is coming.
These are a few examples of what we dealt with:
1. XYZ is a feature (Deduplication) - We (the incumbent vendor) will have that in 6 months so just wait...in the mean time why don't I loan you a few of these other products so that you don't waste your money. (Stall game)
2. We have that feature and it works just like theirs! Buy our product -- if you aren't happy you know that we will do "right by you". By the way ours is lot cheaper so don't spend a premium if you do buy from the upstart -- effectively bringing down the margin. (Result = Stall with a trial to prove difference and margin erosion).
3. We are willing to give you x+y+z so that you can maintain your status as one of our premier customers. Don't you remember (the CIO's name) the award we gave you and the flight on the private plane to NY to join us for dinner. (Result - Executive bias may equal deal getting undone late in a cycle)
4. Free (what CIO does not like free?)
5. Free + decreased cost of other products they buy from the vendor. (Free with a bonus? Wow...why not... I often told IT Executives that if they wanted to get a lower price on all storage to leave my business card out when the incumbent visited as it would result in a larger discount than they already received).
We were lucky our product was truly better than any of our competitors and we knew it...we tried hard to prove value and educate prospects... but at times the incumbents were victorious.
You need to have confidence and be respectful...if we lost a deal we would explain to a prospect that we were disappointed with their decision but respected their choice. If however, when they struggled with their chosen solution we reassured them that we would be there to help...this often resulted in us parachuting our products in to help save the day when they realized they had gotten screwed.
Losing sucks but ripping out the piece of crap that the big vendor stuck on one of their largest customers was really fun.
Be prepared for everything! The big incumbents do not fight fair!
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